Discriminant Analysis Report: Assessing Reliability and Validity of Customer Satisfaction, Service Quality, and Brand Loyalty

Question:

Based on the small sample of data provided, you are required to conduct a discriminant analysis, which consists of reliability analysis and average variance extracted (AVE) testing. Please follow the step-by-step instructions below and present your results in a report.

Instructions:

You have been provided with a small dataset (30 respondents) consisting of three variables (with four
items each). Your task is to assess the discriminant validity of the variables using statistical
techniques. Ensure you report and interpret your findings comprehensively.

Variable Descriptions:

1. Variable 1 (V1): Customer Satisfaction

2. Variable 2 (V2): Service Quality

3. Variable 3 (V3): Brand Loyalty

Questions

1. Step 1: Reliability Analysis

o Conduct a Cronbach’s Alpha test for each variable to assess the internal consistency of the items.

What is the acceptable threshold for Cronbach’s Alpha?

Are the reliability scores for each variable satisfactory? Provide an
explanation. (5 marks)

1. Step 2: Average Variance Extracted (AVE) Calculation

o Calculate the AVE for each variable.

AVE Formula:

o Present the AVE values in a table.

Interpret whether the AVE for each variable meets the acceptable threshold.
(10 marks)

1. Step 3: Reporting Findings

o Summarize your analysis and results in a structured report, including:

Introduction: A brief overview of the dataset and objectives.

Methods: Outline the steps and statistical techniques used.

Results: Include tables and interpretation for discriminant validity tests.

Conclusion: Discuss the implications of your findings. (5 marks)

Guideline:

You are required to write 500 to 800 words.
Submission deadline: 21st December 2024
Justify your answer with references.

Using the font type of “Times New Roman” with a size of 12 and double spacing. You are encouraged to display figures, tables, and other graphical forms in a consistent manner.

Answer

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